Martin v. Cent. Trust Co. of Illinois

Decision Date21 December 1927
Docket NumberNo. 16401.,16401.
Citation327 Ill. 622,159 N.E. 312
PartiesMARTIN v. CENTRAL TRUST CO. OF ILLINOIS.
CourtIllinois Supreme Court

OPINION TEXT STARTS HERE

Error to Second Branch Appellate Court, First District, on Appeal from Circuit Court, Cook County; Lee W. Carrier, Judge.

Final report of the Central Trust Company of Illinois as coancillary executor of the last will and testament of Samuel K. Martin, deceased, objected to by Wilton B. Martin, the other ancillary executor. An order of the probate court approving the report was affirmed by the circuit court and by the Appellate Court, and contestant brings certiorari. Order and judgment of circuit court and Appellate Court reversed and remanded.W. T. Alden, of Chicago (Charles Martin, of Chicago, of counsel), for plaintiff in error.

Fisher, Boyden, Kales & Bell, of Chicago (Walter L. Fisher and Thomas L. Marshall, both of Chicago, of counsel), for defendant in error.

DUNCAN, J.

Plaintiff in error, Wilton B. Martin, coancillary executor with defendant in error, the Central Trust Company, of the last will and testament of Samuel K. Martin, deceased, filed objections in the probate court of Cook county to the final report of the Central Trust Company as coancillary executor. The probate court overruled the objections, approved the report, and allowed the Central Trust Company $1,100 as coancillary executor's fees. On appeal to the circuit court of Cook county, a like order was entered. The Appellate Court for the First District affirmed the judgment of the circuit court, and this court granted a petition for writ of certiorari to the Appellate Court.

The facts proved and stipulated in the record are the following: Samuel K. Martin, a resident of New York, died testate on June 11, 1919. By his will he directed the payment of his debts and funeral expenses, bequeathed $10,000 to the trustees of Princeton University, $1,000 to the Ivy Club of Princeton, and devised and bequeathed the remainder of his estate to his widow and two minor sons. The bequests and devises to his sons were in trust. He named his brother, Wilton B. Martin, a resident of Chicago, and the Central Trust Company of Illinois, executors of his will and and trustees for his two minor sons. His will was duly admitted to probate in the Surrogate Court of New York, and Martin was appointed by that court as sole executor, as the Central Trust Company was not qualified under the laws of New York to act as executor and it did not qualify as trustee. Previous to his death, Samuel K. Martinhad borrowed $35,000 from the Central Trust Company, and had executed his two promissory demand notes to it for $11,000 and $24,000, respectively. He had deposited with the trust company, as collateral security for the loan, certificates for 225 shares of the preferred stock of the Metropolitan Gas & Electric Company, a Delaware corporation, of the par value of $100, certificates for 100 shares of the first preferred stock of the Union Gas & Electric Company, also a Delaware corporation, of the par value of $100, five bonds of the Pine Bluff & Western Railroad Company, an Arkansas corporation, of the par value of $1,000 each five bonds of the Michigan City Gas & Electric Company, an Indiana corporation, of the par value of $1,000 each, and five bonds of the Galveston, Harrisburg & San Antonio Railroad Company, a Texas corporation, of the par value of $1,000 each. Under the signature of Samuel K. Martin to each of the two notes, it is recited that he has deposited with the trust company, as collateral security for the payment of the notes and all other liabilities of any kind by him to the trust company, due or to become due, the certificates of stock and bonds aforesaid, and the trust company or its assigns, at all times and without demand of payment, is given full power and authority to sell, assign and deliver the collateral, or any part thereof, at public or private sale, without advertising the same and without giving notice to Martin. In case of sale, the proceeds thereof, after payment of costs and expenses, including reasonable attorneys' fees, may be applied upon any liability to the trust company, and the surplus, if any, shall be paid to Martin or his assigns. This contract under the notes was also signed by Martin. The notes and collateral were held by the trust company at the time of the death of Martin.

The bonds aforesaid are negotiable securities, are under seal, and payable to bearer. The corporations issuing the certificates for preferred stocks were Delaware corporations, organized as holding companies for the purpose of holding the corporate stocks of operating companies organized under the law of Texas, Louisiana, Arkansas, Washington, Indiana, and other states. The holding companies transacted no business in Delaware except the holding of stockholders' meetings. Their offices, where their business was actually transacted, were in Chicago, at which place directors' meetings were held, all books kept, and all financing done and dividends paid. The officers were residents of Illinois, and the Central Trust Company was sole transfer agent. Neither corporation was licensed to do business in Illinois. The interest on the bonds and dividends on the stock, amounting to $625, up to June 7, 1920, was collected by the trust company as the holder of the collateral security and not as executor. The remainder of the interest, amounting to $1,475, was collected by the trust company as coancillary executor. The notes of the testator held by the trust company were paid by Martin as New York executor on June 7, 1920, who then demanded the stocks and bonds, but the trust company refused to surrender them, and insisted that its duty was to retain the property as coancillary executor in Illinois. A written demand by Martin for the property was made on February 15, 1921, which was refused, and Martin subsequently brought an action of trover in the circuit court of Cook county against the trust company for conversion of the stocks and bonds. Martin, as sole executor in New York, had filed an inventory of the estate in the Surrogate Court of New York, in which he had listed these certificates of stocks and bonds as assets of the estate in New York. That court is the court having jurisdiction of the probate of wills and the administration of estates in New York, and it approved the inventory filed by Martin as executor.

At the time of his death, Samuel K. Martin owned real estate in Illinois, and on December 3, 1919, Wilton B. Martinand the Central Trust Company filed their joint petition in the probate court of Cook county for letters of ancillary administration, and recited in the petition that the property and effects of the deceased in Illinois consisted of personal estate not to exceed in value $50,000, collateral on a loan listed in the New York estate, and real estate not registered under the Torrens Act not to exceed in value $20,000, and that the value of the whole estate of the deceased in Illinois did not exceed in value $70,000. On January 5, 1920, letters testamentary were issued to them as ancillary executors, and they qualified as such executors.

On December 7, 1919, prior to their appointment as ancillary executors in Illinois, Wilton B. Martin, as New York executor, offered to pay the Central Trust Company the two notes, aggregating $35,000 and interest, provided the trust company would deliver to him the stocks and bonds held as collateral. The trust company refused to accept payment on those conditions, claiming the property was assets of the estate in Illinois and that it should be inventoried by the ancillary executors as such and remain in this state until the end of the year for administration. Martin, on the other hand, insisted that the legal situs of the bonds and stocks was New York, where they had been inventoried in the Surrogate Court. Between December 23, 1919, and May 16, 1920, the controversy between Martin and the trust company as to the situs of these bonds and stocks is shown by letters between them, and letters between them and William W. Dixon, attorney for the estate in Illinois. On January 10, 1920, Martin, in a letter to the trust company, stated that he had carefully considered the matter of inventorying these stocks and bonds in Illinois and was of the opinion that the collateral should be returned to the New York estate. He gave his reasons for his opinion, and urged the trust company to deliver the stocks and bonds to the New York estate. In a letter of January 12, 1920, the trust company, in answer to Martin's letter of the 10th, stated that, inasmuch as the questions were entirely legal, it was referring the questions to its attorney, Dixon, for his opinion. On the same day the trust company wrote to Dixon, stating the facts, and asked his opinion as to whether or not the collateral should be delivered to Martin, as New York executor, upon payment by him of the notes. No answer to this letter appears in the record. On February 7, 1920, Dixon wrote Martin, in answer to a letter to him from Martin dated February 5, in which Dixon advised Martin that the property held by the trust company as collateral should be considered as a part of the estate in Illinois and that Martin and the trust company should jointly file an inventory of it in the probate court of Cook county. He stated that this question had been settled and numerous decisions rendered on the point. He also advised Martin that the inventory was due in that month, and requested Martin to sign the inventory which had been prepared by the trust company and return it to him for filing. It seems that Martin did not fully understand the letter to him from Dixon, and on February 16, 1920, wrote him to that effect. Dixon replied on the 20th, and stated that the Illinois law was that the property should be retained in Illinois by the coancillary executors until the close of the administration year, and cited the case of Coombs v. Carne, 236...

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